Are You Getting Stuck in This Entrepreneur Trap?

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“A good plan today is better than a perfect one tomorrow.” – General George Patton

Many entrepreneurs start their company wanting to build the perfect product or service for their customer.

This is a big mistake and here's why.

Perfect can take too long to develop.

Most entrepreneurs have a limited amount of development funds before they need to get paying customers. As Eric Ries discusses in "The Lean Startup," founders can focus on developing the minimum viable product that customers will buy. Paying customers can not only fund product enhancement, but can be asked what they will actual buy in the future.

The customer won’t pay for perfect.

There is a common misunderstanding that in any market, the customer wants the best of breed product. This simply isn’t true because many times the customer only wants “good enough.”

Customers are most likely to buy when they are in pain and have the money to solve that pain.Through product purchases, the entrepreneur finds out how much the customer will pay to fix their need.

Perfect isn’t profitable.

Providing a high quality product or service that a customer is not willing to pay for will not be profitable or sustainable. In this case, perfect may just cost too much to be practical. You want to ensure that your company will have high enough gross profit to market a given product.

It breaks the 80/20 rule.

The Pareto principle dictates that it takes 20 percent of the time to complete 80 percent of a task and that the last 20 percent of a task takes 80 percent of the effort. These diminishing returns in many cases do not makes sense for the profitable business.

Perfect can lead to dissatisfied decision-making.

Gretchen Rubin of "The Happiness Project" states there are two kinds of decision makers: “Satisficers are those who make a decision or take action once their criteria are met. That doesn’t mean they’ll settle for mediocrity; their criteria can be very high, but as soon as they find the business card that has the qualities they want, they’re satisfied. Maximizers want to make the optimal decision. Even if they see a bicycle or a backpack that meets their requirements, they can’t make a decision until after they’ve examined every option, to make the best possible choice.”

Her studies suggest that satisficers are happier than maximizers. This is because maximizers spend a lot more time and effort to reach a decision, and still get anxious about whether they made the best choice.

A corollary to “good is better than perfect” is: “done is better than perfect.” This does not mean doing a mediocre job or producing a poor-quality product. Being done and finishing a task gives every business person an outcome. This result will give them important success or failure metrics to decide what their next step will be.

Are You Launching a New Product or Service?

Are you trying to grow your market share? Are you creating a new product or service offering? Or do you simply seek a way to carve out better margins on your current service offerings? Knowing your customer segments—and why those customers will buy from you—is crucial to your success. Develop a compelling and unique value proposition to refine your go-to-market strategy and to improve how you launch products and services by attending the Value Proposition Workshop.

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